Why is Sportpesa very successful?

Sportpesa is now the most popular local website in Kenya, falling only behind Citizen TV’s official news site. This is according to the November 11, 2015 Alexa rankings; Alexa is the internet’s leading authority on website rankings according to traffic. This statistic alone may not have the ability to show you the success that Sportpesa.com, a relatively new sports betting website, has experienced.
Sportpesa now sponsors a long list of sporting events across the country, including the Kenya Premier league to a tune of Sh360 million until the 2019 season. Sitting conspicuously on top of a similarly long list of failures, the 2 year old company is now the most successful e-business in Kenya with an estimated annual revenue of Sh4.2 Billion. Read this post to find out how sports betting companies guarantee they profit from all bets placed irrespective of results.

Who owns Sportpesa?

Sportpesa is owned by Pevans East Africa with Guerassim Nikolov as the CEO. Guerassim Nikolov has been involved in the local gambling Industry for very many years, and was the brainchild behind First Lotto Ltd which ran the Toto 6/49 competition more than a decade ago.

Sportpesa was launched in 2014, along with a cash injection of Sh400 million by the company, in an attempt to tap into the Kenyan gambling industry which PricewaterhouseCoopers describes as a billion shilling industry. PricewaterhouseCoopers estimates that Sh1.98 billion was the total revenue generated by the industry in 2014.

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Source: Sportpesa

In addition to being the 10th most popular website in the country, Sportpesa’s Key stats include:

Alexa Rank (Kenya): 10

Registered Users: 1,000,0000+

Estimated Monthly Revenue: Sh350 million.

Daily Unique Vistors: 46,091

Monthly Unique Visitors: 438,534

Bounce Rate: 11%

Daily Time on Site: 28:43

Behind the Stats

It is estimated that each Sportpesa user spends an average of Sh500 each month on the site. Having 70% active users means that the company generates close to Sh.4.2 billion per year. This figure alone surpasses the revenues generated by all other gambling services functioning in the country combined. Sportpesa is visited by close to 50,000 users, each spending an average of 28 minutes on the site every day. The former figure is not astonishing by current standards, but the later (28:43 minutes average on site time) reveals a very impressive figure.]

In contrast, Kenyans spend only an average of 15 minutes per visit on Facebook and far much less time (2 minutes per visit) running Gooogle searches. This is a testament to the near-religious following that Sportpesa has gained in the country. The very low bounce rate of 11% further legitimizes our suspicions (The bounce rate discloses the percentage of visitors to a site who view the homepage only before leaving the site).

Sportpesa Website stats. Source: Alexa

Furthermore, their total monthly pageviews (number of times pages on the site are viewed) of around 16 million means that if Sportpesa decided to use Google Adsense, they still have a very good chance of generating more income than most major local websites including even the key media houses.

We can confidently place the success rate of new online businesses in Kenya at less than 10%. Over the past 10 years you can probably name more than 10 failed businesses for each successful online business that is still out there. Besides, success is a very debatable trade aspect in the online business niche. Unlike in traditional brick and mortar businesses where business success is measured solely by the growth and profits, very many other variables come into play when it is an e-company. Most new online businesses fail due to their inability to understand key features of the online marketplace, as well as a use of ineffective marketing and monetization policies.

Key Lessons from Sportpesa.com Success

Educate your market

The most impressive aspect of Sportpesa’s success was their ability to convert a local and ripe soccer-crazed fanbase, into a nation obsessed with sports betting – overnight. Before Sportpesa, soccer betting was unheard of and the company invested millions in an attempt to familiarize locals with the ins and outs of football betting. Instead of catering only to the pre-sportpesa gambling market that included a few soccerfans who occasionaly engagesd in sports betting, Sportpesa educated and converted the rest of the football fans into hooked gamblers. Additionally, they put in place a system that used a gradual assimilation process. With this in mind the company introduced Sportpesa with very limited betting options. In fact, during the 2014 World Cup in Brazil users could only place bets on the outcome of the matches; that is a bet on which team will win and if the match will end in a draw. Over the past year, the company has gradually introduced new betting options to their users to avoid overwhelming them.

Sportpesa was not the first major investor in the Kenya sports gambling industry. In fact the first investor in this market was Gaming international – a Ugandan sports gambling firm – that set up camp in the country in December 2012. The firm’s investment of Sh300 million was only Sh100 million shy of Pevans’ injection, but a combination of poor consumer education and apparent lack of support services led the company to wind down its operations at the beginning of 2015. Gaming International’s Investment was very brilliant, but it was too ahead of its time. Mobile money was not as vibrant, and the Kenyan market was still unripe.

In the online marketing niche, very few traditional marketing channels can result in a positive ROI. Case in point; Betway, a Sportpesa competitor, put in place a very ineffective marketing campaign that involves the rigorous use of traditional sales and marketing strategies. Betway’s marketing campaign involved the use of actual sales agents positioned across major cities, similar to what banks and telecommunication companies employ. This will most likely not win Betway as many new local users as they expected. Sportpesa’s Rafiki Bonus portrays a more progressive e-marketing campaign that should serve as a marketing blueprint to be replicated by new players.

Source. Betway Kenya

On the other hand, Sportpesa’s success is threatened by the onslaught of numerous competing websites in the sports betting industry. Bookies tend to sniff out opportunities faster than it takes them to send your winnings. Pevans should be ready to fend off competition from new competitors. This includes both the smaller local competitors e.g. ElitebetKenya, as well as the bigger and more established brands e.g. Betway who have access to a larger pool of investment funds. Regardless, Sportpesa’s success is quite an achievement that should be used to encourage more people to join the local and bustling e-industry.